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Steve Jobs' Vision of Software Meets the Internet of Things

Each and every day, in every facet of our lives—at work, at home, on the road, at lunch, and in stores and schools and shops and fitness centers and bars and on airplanes—we’re reminded constantly that the mobile phone has become as ubiquitous and indispensable as clothing.

At a deeper level, that also means that software is becoming more pervasive and more essential as it spreads from its formerly limited confines of computers, phones, and tablets and permeates the full constellation of stuff that surrounds us:

from light bulbs to refrigerators, from buses to shoes, from tractors to televisions, and from the meat section of your grocery store to the jet engines in the plane you rode in on.

Here’s an example from a piece I wrote about 10 weeks ago, and as you think about how this example represents the astonishing software surge taking place all around us, you’ll get a deeper understanding for why this “Internet of Things” thing is becoming the Next Big Thing:

Or how about that prototypical mechanical brute, the automobile? In 1990, electronics and software made up only 16% of a vehicle’s total value. By 2001, that figure had jumped to 25%. And in 2010, it had reached about 40%–and according to a recent study, all that techy stuff being jammed into cars will generate the overwhelming of automotive innovation from here on out: “We don’t expect to see any ground-breaking innovations for mechanical parts,” says Dr. Alexander Borusan, head of the Fraunhofer Institute for Software and Systems Engineering (ISST) in Berlin. “Electronics and software account for 90 percent of innovations.”

I was reminded of this recently while reading an intriguing article by Barb Darrow of GigaOm in which she touched on General Electric’s strategic intent to infuse the power of software into the equipment it designs and builds, an infusion that could lead to massive new Big Data opportunities for GE and other companies taking similar approaches:

“GE is banking on the growing acknowledgement that machine data — information generated and collected by the types of industrial gear it makes — gives it an entry into the booming world of big data,” writes Darrow.

“It may be easy for folks in the [Silicon] valley to forget that GE has thousands of its own software developers on staff and builds sophisticated medical imaging and other high-tech gear: it does have credibility,” says Darrow later in the article. “And, at a time when the emphasis on making and building actual products is more valued, GE has lessons to teach.”

Many other companies in many industries are also awakening to the power of software and the ways in which the Internet can redefine products and services and their untapped commercial potential.

It’s an idea that Steve Jobs championed at Apple—the supremacy of software—and one that he articulated quite bluntly a couple of years ago during a quarterly earnings call in answer to a financial analyst’s question. Here’s part of what Jobs said:

You’re looking at it wrong. You’re looking at it as a hardware person in a fragmented world. You’re looking it as a hardware manufacturer that doesn’t really know much about software, who doesn’t think about an integrated product, but assumes the software will somehow take care of itself. . . . And you assume that the software will somehow just come alive on this product that you’re dreaming of, but it won’t.

Back in those long-ago days of late 2010, Jobs was talking about tablets and smartphones. But today, his software-first perspective can be applied to an ever-growing range of businesses. Consider this excerpt from a recent piece in MIT Technology Review headlined 2013: The Year of the Internet of Things:

Other examples abound. Various cities have kitted out their transport networks with sensors that broadcast the position of buses, trams and trains and make this data available to the public.

Various innovative apps now give commuters real-time updates on the position and likely arrival time of their next ride. Other sensors monitor traffic conditions allowing real-time optimisation of traffic flow.

Another example of the emergent Internet of Things is the widespread adoption of sensor technology to monitor sporting performance. Nike+ and Fitbit sensors collect data about workouts, send it to a central server which users can then access to analyse their performance. The collection and transmission happens largely without any human intervention.

Then there are the emerging applications aimed at everyday life. Ninja Blocks is an Australian start up that is developing the technology that allows anybody to monitor and control their homes remotely over the internet. They plan to ship their second batch of devices in March.

The message from Zaslavsky and co is that the Internet of Things is coming of age and growing at an exponential rate. If it doesn’t already influence your life in a way you recognise, it soon will.

Clearly, this will software-driven Internet of things will create wonderful new capabilities and possibilities for consumers. And for businesses willing to put software at the center of their thinking—those who are able to avoid the trap cited by Jobs as “looking at it as a hardware person in a fragmented world”—the opportunities are enormous.

As my colleague Judson Althoff wrote recently in this space in a piece called Billions of Reasons to Get Ready for Big Data, “By the end of the decade we could see tens of billions of new Internet-connected devices. The majority of business data may end up being generated by these billions and billions of Internet-enabled devices of all types, sending back huge amounts of data to corporate servers or the cloud. The business opportunities opened up by this device-to-data center world, with billions of Internet-connected devices generating Big Data, are the next big thing.

“The explosion in the number of Internet-connected devices (sometimes called the “Internet of Things”) is actually a huge opportunity for businesses, ISVs, and others,” wrote Althoff. “But capturing that opportunity takes capabilities that stretch from individual devices out in the field to powerful business analytics tools back in the data center, mining all the Big Data collected by those devices.”

In the end, business leaders will need to push their entire organizations to look differently at how they evaluate new products and services, how they redefine their value propositions, how they seek to engage with customers in new and more socially engaged ways, and how they capture and exploit all that Big Data that will come streaming forth as the new software imperative meets the Internet of things.

And as those new dynamics begin to touch more parts of our personal lives as well as our professional lives, many companies would do well to think hard about another comment Steve Jobs made on that earnings call back in mid-October 2010:

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